“The European Central Bank and the U.S. Federal Reserve will very likely provide even more stimulus to their economies, said the chief executive of Pimco, the world’s largest bond fund.
The two powerful central banks are “all in” as they act to give lawmakers more time to resolve problems in Europe and the United States, Mohamed El-Erian, who is also co-chief investment officer of Pacific Investment Management Co., said at a conference hosted by The Economist magazine.
In a wide-ranging speech that touched on Europe’s debt crisis and suggested that a contraction in the U.S. government bond market is unlikely, El-Erian said he sees a 60 to 70 percent chance U.S. politicians will strike a “mini bargain” to avoid looming tax rises and spending cuts at year-end, known as the fiscal cliff.”
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